Friday, June 6, 2014

Payrolls Rose by 217,000 in May, Unemployment Rate Unchanged at 6.3%

The economy added 217,000 jobs in May and the unemployment rate was unchanged at 6.3%, according to the U.S. Bureau of Labor Statistics. May’s payroll increase more than recovered all of the jobs that were lost during the recession. May’s report also included a slight downward revision to April’s figure by 6,000 jobs.

The private sector, particularly the services industry, continues to drive job growth. The services sector alone added 198,000 jobs, although slightly lower than the revised 224,000 the month prior. The goods producing sector added an additional 18,000 jobs. Durable goods saw sizable gains , adding 17,000 jobs. Government employment increased at a slower pace, adding 1,000 jobs, driven by local governments. The federal government contracted by 5,000 jobs, a trend that is likely to continue as the federal government cuts its budget and shrinks in size.

The unemployment rate and the labor force participation rate remained unchanged from a month ago at 6.3% and 62.8%, respectively. In addition, the employment-to-population ratio was also unchanged at 58.9%. Notably, the number of job losers and people who completed temporary jobs declined by 218,000 in May. Furthermore, the number of unemployed reentrants increased by 237,000, partially offsetting a large decrease in April.

However, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.4 million in May. These individuals accounted for 34.6% of the unemployed. In addition, the number of individuals marginally attached to the labor market in May was little different from a year earlier, at 2.1 million persons.

During the recession the economy lost 8.7 million jobs. In May, payroll employment surpassed its prerecession peak by 98,000 jobs. Although the U.S. may have regained the jobs lost during the recession, the numbers are not comparable because the job gains do not include the growth of the working-age population.

Furthermore, according to a recent study by the Federal Reserve Board of New York based on the tri-state area and Puerto Rico, “the types of jobs created during the recovery are not the same as those that were lost during the recession.” While the type of jobs lost in the nation and across the region were middle-skill jobs, the types of jobs that were recovered were higher-skilled jobs and lower-skilled jobs, illustrating the decades-long trend of job polarization.

Read the BLS report.

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